Old or new tax slab, know which is better – New tax slab: old or new tax slab, know which is better, how the common man will benefit

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Clothing and tax expert Balwant Jain says income taxpayers can choose between old and new tax slabs based on their tax liability. The new slab differs from the old one in two respects. First, it has more slabs with lower rates. Second, opting for the new scheme does not give the benefit of more than 70 types of exemptions and deductions, which are available in the old tax slab. In this situation, the income taxpayer should calculate the tax liability at the applicable normal rates after making use of all exemptions and deductions on their earnings.

  • For example, opting for the old slab allows a taxpayer of income tax to save up to Rs 1.5 lakh in a fiscal year on various types of investments under section 80C of the Income Tax Act. the income. Apart from this, salaried employees can claim an exemption of Rs 50,000 for LTA, HRA, standard deduction.
  • In the new slab, the personal income taxpayer does not have any kind of exemption as in the old system.
  • In this situation, income taxpayers would have to calculate the tax liability on their total earnings under the new tax. Then only after comparing the two should you choose the best slab for yourself.
… the ease of replacing them every year

Employees or pensioners, who have no income from the company, can opt for one of the new or old tax regimes every year. If the source of income is the business, after choosing the new system, you can go back to the old slab once.

These exemptions will not be available in the new system

  • Special deductions such as childcare allowance, hostel allowance, transportation allowance, uniform allowance under 2BB.
  • SEZ exemption under section 10AA.
  • Deduction for show allowance and business tax according to article 16.
  • Home loan interest subsidy.
  • Different types of deduction according to 32AD, 33AB, 33ABA.
  • Exemption according to 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA and 80TTA or 80TTB.

Good new slab for them
If the taxpayer’s income tax age is less than 30, the new slab will be better for them. Apart from this, opting for the new system can also be a better option for people earning less than Rs 10 lakh.

  • If your earnings are Rs 15 lakh or more, the new slab is better. The highest tax on this is 30 percent.
  • This agreement is beneficial for income taxpayers who claim lower exemptions and deductions.

Adopt the 20 percent formula to choose the slab
You can follow the 20% formula to choose the new or old tax slab. By virtue of this, even if you have not taken out any home loan, or acquired any insurance or made any investment, you can claim the exemption from the children’s school fee, the rental of the home, the contribution to the PF and the standard deduction, etc. If this exemption is 20% of your income, you can opt for the old tax regime. -Adil Shetty, CEO of Bank Bazaar

Expansion

Clothing and tax expert Balwant Jain says income taxpayers can choose between old and new tax slabs based on their tax liability. The new slab differs from the old one in two respects. First, it has more slabs with lower rates. Second, opting for the new scheme does not give the benefit of more than 70 types of exemptions and deductions, which are available in the old tax slab. In this situation, the income taxpayer should calculate the tax liability at the applicable normal rates after making use of all exemptions and deductions on their earnings.

  • For example, opting for the old slab allows a taxpayer of income tax to save up to Rs 1.5 lakh in a fiscal year on various types of investments under section 80C of the Income Tax Act. the income. Apart from this, salaried employees can claim an exemption of Rs 50,000 for LTA, HRA, standard deduction.
  • In the new slab, the personal income taxpayer does not have any kind of exemption as in the old system.
  • In this situation, income taxpayers would have to calculate the tax liability on their total earnings under the new tax. Then only after comparing the two should you choose the best slab for yourself.

… the ease of replacing them every year

Employees or pensioners, who have no income from the company, can opt for one of the new or old tax regimes every year. If the source of income is the business, after choosing the new system, you can go back to the old slab once.

These exemptions will not be available in the new system

  • Special deductions such as childcare allowance, hostel allowance, transportation allowance, uniform allowance under 2BB.
  • SEZ exemption under section 10AA.
  • Deduction for show allowance and business tax according to article 16.
  • Home loan interest subsidy.
  • Different types of deduction according to 32AD, 33AB, 33ABA.
  • Exemption according to 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA and 80TTA or 80TTB.

Good new slab for them

If the taxpayer’s income tax age is less than 30, the new slab will be better for them. Apart from this, opting for the new system can also be a better option for people earning less than Rs 10 lakh.

  • If your earnings are Rs 15 lakh or more, the new slab is better. The highest tax on this is 30 percent.
  • This agreement is beneficial for income taxpayers who claim lower exemptions and deductions.

Adopt the 20 percent formula to choose the slab

You can follow the 20% formula to choose the new or old tax slab. By virtue of this, even if you have not taken out any home loan, or bought any insurance or made any kind of investment, you can claim the exemption from the children’s school fee, the rental of the home, the contribution to the PF and the standard deduction, etc. If this exemption is 20% of your income, you can opt for the old tax regime. -Adil Shetty, CEO of Bank Bazaar

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